Tom.com Loses Its Top Cat

HONG KONG (07/19/2000) - The chief executive officer who led Tom.com through Hong Kong's most frenzied Internet IPO and once dubbed it a seed for creating the "Time Warner of China" has left the company.

Carl Chang joined the Hutchison Whampoa Ltd.-backed Tom.com in December of last year. When the company announced in February that it was going public, thousands of investors lined up for blocks to get in on what seemed to be a magic recipe: a Web site for Chinese readers around the world, blessed by the Midas touch of tycoon Li Ka-shing.

As crowds clamored for shares, streets had to be closed. One on-duty police officer was disciplined for trying to hand in his own application. The general manager of the listing's lead sponsor, BNP Prime Peregrine, had to apologize for failing to anticipate the chaos. When the stock started trading on Hong Kong's Growth Enterprise Market on March 1, it quadrupled, giving the company a market capitalization of nearly US$2.5 billion at closing.

While skeptics wondered how a portal site with five pages of content was going to live up to such mania, Chang stoked the crazed sentiment. Now, less than five months later, he is gone.

"He painted a glorified picture of Tom.com," says Jonathan Iu, an Internet analyst at SG Securities. "He should be obliged to stay. Basically, he engineered the IPO and now his departure is not a very good signal to investors. It's a subtle hint that the CEO doesn't think there is a viable business model."

For now, Chang and Tom.com aren't saying much. A company spokesperson said Chang is on holiday and unavailable for comment. She added that upon his return, Chang will take up a new role at Hutchison's e-commerce division, where he will head a media convergence unit.

In the meantime, Tom.com has appointed Sing Wang, formerly the chief investment officer, to be the new CEO. According to the company, Wang is from China and worked for the Chinese Academy of Sciences before furthering his studies in the U.K. Wang worked with Goldman Sachs in Asia for seven years and did a short stint with its China High Technology group in 1999 before moving to Tom.com this year. A spokesperson said that Wang would try to meet with reporters at the end of the week.

Some industry observers point to turnover at the company's senior levels as a sign of more trouble ahead for Tom.com. Last month the chief operating officer, Terry Ho, also left.

"It seems that even by Internet standards, there is a high rate of rotation in senior management positions at a critical time in the company. It makes one wonder if there is any strategy in place," says David Webb, editor of Webb-site.com, a consumer watchdog site for investors.

Tom.com's shares closed at $5.95 (Hong Kong dollars) at the end of Wednesday trading.

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